Star car designer Henrik Fisker has driven another leg on his road to redemption. On Friday, his second-try electric car effort, Fisker Inc., merged with special purpose acquisition company Spartan Energy Acquisition Corp., raising $1 billion of much-needed funds in the process. In its first day of trading on the New York Stock Exchange under the symbol FSR, the stock climbed 13% to close at $10.14.
Fisker says that’s all the money he’ll need to bring his planned electric SUV, the Fisker Ocean, to market at a price under $40,000. Last month he struck a deal with Canadian auto manufacturing giant Magna International to supply key components of the vehicle, with mass production planned to start in about two years.
It’s quite a different strategy than what Fisker tried last time around. A decade ago, Fisker Automotive designed, manufactured, and sold the Fisker Karma hybrid electric sports car priced at over $100,000. It was an expensive flop, plagued by delays and quality issues, and the company ended up in bankruptcy.
The man who designed the Aston Martin DB9 and the BMW Z8 says he has learned his lesson. “You’ve got to give up your ego,” Fisker told me when I spoke to him this summer. “A lot of the hardware in vehicles is going to end up being a commodity, and therefore we are willing to share those parts with somebody else.” Like an EV version of Apple or Nike, the plan is to win over buyers with sharp looks and great design without needing to make every part itself. “Emotional design is going to be in the foreground of vehicle purchasing in the future,” he said. “We’re going to be the leader in that, both inside and outside and also the entire user interface.”
Sounds smart. On the other hand, Car and Driver magazine this month has a deep dive into the electric vehicle market and the news is not so good. Few consumers are interested in converting to EVs any time soon, the sticker prices of even the cheapest EVs are well above the price of entry-level gas-powered cars, and the big automakers don’t have the brand cache to attract the people who do want—and can afford—an EV. Beyond Tesla, no carmaker has had a major success with an electric car yet.
Then there’s the crowd of newcomers. Fisker is hardly the only EV startup to debut on the stock market this year. Two-year-old EV component maker Hyliion Holdings and EV truck maker Lordstown Motors (making a go at it in the famed General Motors Ohio factory) merged with SPACs to go public last month. Both also rose in their first day of trading but have since tumbled. Hyliion plunged 52% in a few weeks and Lordstown 31% in just a few days. Other EV stocks also had a terrible last week. Tesla lost 9%, controversial Nikola Motor fell 19%, and Workhorse Group plunged 24%.
Still, stock market machinations aside, Fisker says he has all the resources in place to bring the Ocean to market. It’s hard to root against him.
In the latest episode of our Fortune Reinvent podcast, Land O’Lakes SVP Heather Anfang explains how the agricultural cooperative dealt with the COVID-19 pandemic and resulting shocks to demand for its products.